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US STOCKS-S&P 500, Nasdaq hit record highs on IBM, chip power

US STOCKS-S&P 500, Nasdaq hit record highs on IBM, chip power

The S&P 500 and the Nasdaq hit record highs on Wednesday as a strong forecast from IBM added to optimism over earnings, while investors assessed risks from a virus outbreak in China.

International Business Machines Corp shares jumped 3.5% after the company forecast full-year profit above market expectations on strength in its high-margin cloud computing business. Technology stocks, which have played a pivotal role in Wall Street's recent record run, rose 0.8%, with chip stocks gaining from a strong forecast by Dutch semiconductor equipment maker ASML Holding NV.

The Philadelphia Semiconductor index jumped 1.7%. Beijing stepped up measures to curb the outbreak of a new flu-like virus that has killed 17 and infected 540 in the country, reassuring investors after concerns over the fallout pulled Wall Street off its record highs on Tuesday.

The outbreak, which revived fears of a pandemic similar to the Severe Acute Respiratory Syndrome (SARS) in 2003, had roiled travel and airline stocks in the previous session, as millions of people prepared to travel for the Chinese Lunar New Year. Many of those stocks recouped some losses. The NYSE Arca airlines index rose 0.9% after falling 2.6% on Tuesday.

"Investors have been very bullish, thanks to de-escalating risks, which is causing valuations to expand - the sort of context that becomes more sensitive when a new risk like the virus emerges," said Salman Baig, a cross-asset investment manager at Unigestion. "Earnings so far have been fairly good. We're not seeing outsized surprises, but good results, and I think that's also helping markets."

Netflix Inc's shares gave up early gains to trade 2.1% lower after the streaming video pioneer beat estimates for quarterly subscription growth, but warned of a tough first quarter. At 11:31 a.m. ET, the Dow Jones Industrial Average was up 0.06% at 29,214.26.

The S&P 500 gained 0.26% to 3,329.27 and the Nasdaq Composite jumped 0.50% to 9,417.90. Among other weak spots was Johnson & Johnson, dropping 1% after the healthcare conglomerate forecast full-year profit largely below expectations.

The Dow came under pressure as Boeing Co extended losses after announcing further delay in the return of its 737 MAX jets to service. Advancing issues outnumbered decliners by a 1.36-to-1 ratio on the NYSE and a 1.23-to-1 ratio on the Nasdaq.

The S&P index recorded 103 new 52-week highs and one new low, while the Nasdaq recorded 143 new highs and 18 new lows.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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